In Brazil, boleto bancário accounts for nearly a quarter of all e-commerce payment transactions. The local payment method is often the only alternative to receive payments from the vast population of unbanked Brazilian consumers as well as from enterprises and government entities. Due to its popularity, more and more online businesses see the need to offer boleto bancário as an option on their checkout page, even those offering their products or services on a subscription basis.
However, offering recurring payments with boleto can seem problematic for many online merchants. The main reason for that is that the popular Brazilian payment method requires an action on the users’ side to complete the payment. Nonetheless, Brazilian consumers are not only used to paying for services such as gym subscription, magazines/newspapers subscription and school/university tuition on a recurring basis with boleto, but they expect to have the option to choose boleto as a payment method for many subscription-based services.
Why Offer Recurring Payments with Boleto?
There are several reasons why merchants should consider offering recurring payments with boleto on their online stores. Below, we list some of them:
- Easier access to B2B clients: online businesses focusing on the B2B segment must have this option if they want to succeed. Although recurring payments with credit cards are popular among natural persons, enterprises often require paying by boleto. This happens because corporate credit cards are not very popular in Brazil and many companies require approval for the purchase or worry about inaccurate charges. In addition, boletos facilitate businesses’ accounting. Furthermore, both businesses and natural persons tend to prefer paying via boleto so as to not compromise their monthly credit limit with fixed expenses. If every subscription service carries out recurring billing via credit card, they will see their credit consumed with fixed expenses.
- Access to unbanked consumers: 55 million adults in Brazil don’t have a bank account and about 20 million don’t have access to any banking service whatsoever. For these consumers, boleto is the only alternative to purchasing online. By offering recurring payments with boleto, merchants can expand their audience and increase their sales.
- Cashflow: for credit card payments, Brazilian acquirers do the payouts after 31 days and charge high fees for anticipating the funds. Payment processing services might have different settlement options, but there’s generally costs for anticipation. On the other hand, as the money from boleto payments is generally available within 2 to 3 business days from the payment date, merchants with a certain transaction volume can benefit from better cashflow without the need to pay anticipation fees.
- Lower processing fees: when compared to credit cards, boletos have better processing fees. This can help merchants increase their profit margin.
Automatizing Recurring Payments with Boleto
A great advantage of recurring payments with credit cards is the possibility of having the entire process automatized. Even though the customer cannot be automatically charged via boleto, it is possible to automatize the process of generating and sending the boleto to the consumers periodically. In fact, such automation is essential to an effective strategy of recurring payments with boleto.
PagBrasil offers an ideal solution for merchants who sell subscription products or services. A combination of the integration of our Boleto Flash® or Boleto Express and our e-mail service, that automatizes sending confirmation and reminder e-mails to buyers makes the process a lot simpler. Online businesses using PagBrasil’s platform only need to schedule the charges and send it via API. PagBrasil will then send e-mails to consumers with the boleto link that can be paid electronically or in cash at any authorized entity. In addition, PagBrasil’s system allows merchants to generate several boletos with different payment dates so that they can be sent in bulk to consumers. The e-mail service then sends payment reminders before the expiry date of each boleto. PagBrasil’s boletos can also be retroactively extended, making it easier for merchants to adapt to their customers’ needs.
It is worth noting that the e-mail template can be changed according to merchants’ requests. However, it is recommended to notify consumers in advance and offer them the option to extend the payment date if they need to or at least inform that the service will be discontinued after a certain date if the payment is not received.